Goals, Systems, Team
How to build your real estate empire
I just moved back to the USA after 7 years in Australia, specifically to my hometown, Cleveland after 19 years. Why? The move was inspirited by an invitation to work on real estate developments with my father and brother. On my own, I’ve been developing sites in Australia for the past two years. Now I have the opportunity to up my game on a team of skilled operators on larger projects. I’m also going to build a multifamily portfolio separately and document the acquisition of deal #1 on my Bigger Pockets blog.
I’ve been sourcing houses and small multifamily for Australian investors since 2010. In 2102 I managed to reposition a Phoenix 16 plex in 18 months and earn my partnership a 42% ROI from my desk in Melbourne. It was hard though being so far away. I made it a goal of mine to build a multifamily family portfolio when I returned to the USA some day and begin with 100 doors in year one. That’s the goal.
I have experience now with lofty goals. I moved to foreign country, started a business and put together a real estate development partnership that exits all projects with wins. I knew that I had to be clear communicating my goals to the people who I would be meeting as I integrated back into work and life in Cleveland. As an active real estate investor I am always looking for the next opportunity and always asking direct questions that will fill in any blanks on the path toward my goal.
What about due diligence? That’s ongoing and I will cover research in future blogs. Yesterday, a phone call with a multifamily broker with whom I was reconnecting lead to the address of a 42-unit property that fits the profile of what I want to buy first. As chance would have it he has a listing that I will use to build my system for deal number one.
I know that if I want to scale to 1000 doors, I will have to build a bomb proof, step by step system to evaluate deals, engage my team and then decide to either pass or make an offer. In order to achieve this I need real numbers for a real deal.
My brother is skilled at identifying the fluff numbers in a pro forma and will help me build the model that we will use to run our numbers. I am going to track every step we take in evaluating the listing package and form the base for the system that we will then create and tweak as we move forward. In a few weeks we should be able to evaluate deals in our system quickly and efficiently so that we know exactly where to focus out energy.
Here’s the first hack. I’m reaching out to other people who have done what I want to do so that I can ask them specific questions about how they evaluate apartment buildings. Second, I am actively searching for a mentor within my professional network that will act as a sounding board when I encounter obstacles. I will begin with a framework and then plug in what is proven to work for other operators.
There are multiple layers to the team required to be a successful multifamily operator. I already mentioned a mentor and my brother who is already skilled in multifamily operations and numbers. I have partners from past projects who have cash on hand to invest and skills that I lack. I believe that this is the most important step in the journey towards my goal. Surrounding yourself with reputable professionals who posses the skill sets that you must have to be successful is mission critical. I will be spending the next several weeks recruiting necessary players who have experience and writing about it.
Now my job is to hit the phone and tee up meetings with the people who will form the base of my professional team: accountant, attorney, lenders, insurance agents, partners, and a mentor. This is the same proven approach I took to achieving my real estate development goal in Australia.
I believe that everything big is the product of small. In order to be successful in any business and scale up you have to start with an achievable goal, build a system and recruit a team. To accelerate in your real estate niche you have to surround yourself with people who understand your goal and have overcome the obstacles that you will face along the way.
So here we go! It’s day two and I will have plenty or real time insight to share with you as I progress towards my goal.
*** this is blog post number one about the steps I am taking to acquire my first apartment building in Cleveland, Ohio.
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